NCR Corp.on March 31 amended and restated its credit agreement with and among certain lenders,certain of its foreign subsidiaries and JPMorgan Chase Bank NA as the administrativeagent.
According to a Form 8-K filed April 4, under the agreement, NCRrefinanced its senior secured credit facilities. The senior secured credit facilitieshave an aggregate amount of $2 billion, consisting of a term loan facility in theamount of $900 million and a revolving facility in the amount of $1.10 billion.Loans under the term loan facility were used to repay outstanding obligations underthe prior credit agreement. The revolving facility is available for working capitalrequirements and other general corporate purposes.
The credit agreement makes available up to $400 million of therevolving loans to certain foreign subsidiaries of NCR. Borrowings by the foreignborrowers are guaranteed and secured by NCR and certain guarantors. Term loans weremade to NCR in dollars, and revolving loans will be available to the borrowers indollars, euros and sterling.
Amounts outstanding under the credit facilities bear interestat LIBOR, or in the case of amounts denominated in euros, EURIBOR, or at NCR's option,in the case of amounts denominated in dollars, at a base rate equal to the highestof the federal funds rate plus 0.5%, JPMorgan's prime rate and the one-month LIBORrate plus 1.00%, plus, in each case, a margin ranging from 1.25% to 2.25% for LIBOR-basedloans that are either term loans or revolving loans and EURIBOR-based revolvingloans, and ranging from 0.25% to 1.25% for base rate-based loans that are eitherterm loans or revolving loans, in each case, depending on NCR's consolidated leverageratio.
NCR will pay an undrawn commitment fee ranging from 0.20% to0.40%, depending on its consolidated leverage ratio, on the unused portion of therevolving facility. For letters of credit issued under the revolving facility, NCRwill pay a fronting fee as agreed with each issuing bank on the aggregate face amountof each letter of credit and a fee on all outstanding letters of credit at a perannum rate equal to the margin then in effect with respect to LIBOR-based loansunder the revolving facility on the face amount of such letter of credit.
The outstanding principal balance of the term loans is requiredto be repaid in equal quarterly installments beginning June 30 in annual amountsequal to 5.0% of the original amount of the term loans in the first two years afterthe effective date, 7.5% in year three after the effective date, and 10.0% in yearsfour and five after the effective date, with the balance being due at maturity onMarch 31, 2021. NCR may voluntarily prepay borrowings under the creditfacilities at any time and from time to time, without premium or penalty, otherthan customary breakage costs and fees for LIBOR-based loans.
Additionally, under the credit agreement, NCR can request, atany time and from time to time, the establishment of one or more term loan and/orrevolving credit facilities with commitments in an aggregate amount not to exceedthe greater of $150 million and such amountas would not during any non-investment grade period cause the pro forma securedleverage ratio to exceed 2.50 to 1.0 and at any time other than during a non-investmentgrade period cause the pro forma leverage ratio to exceed a ratio .50 less thanthe leverage ratio then applicable under the financial covenants, the proceeds ofwhich can be used for working capital requirements and other general corporate purposes.
JPMorgan, Suntrust Robinson Humphrey Inc., RBC Capital Markets,Merrill Lynch Pierce Fenner & Smith Inc., Bank of Tokyo-Mitsubishi UFJ Ltd.and Wells Fargo Securities LLC acted as joint lead arrangers, joint book runnersand co-syndication agents under the credit agreement. JPMorgan will act as soleadministrative agent and collateral agent.